Guangdong Investment Limited (Stock Code: 00270) announced that its indirect non-wholly owned subsidiary, Zhongshan GDH Energy Service Co., Ltd. (“Zhongshan Energy Service”), entered into the 2025 Electricity Service Framework Agreement with Guangdong Yuehai Water Co., Ltd. (“Guangdong Yuehai Water”), a wholly-owned subsidiary of Guangdong Holdings. This agreement will run from 1 January 2026 to 31 December 2028, succeeding the 2022 Electricity Service Framework Agreement which expires on 31 December 2025.
The transactions under the new agreement, which entail the supply of electricity by Zhongshan Energy Service (through power grids in Guangdong Province) to designated projects of the Guangdong Holdings Group, constitute continuing connected transactions under Chapter 14A of the Listing Rules. As the applicable percentage ratios exceed 0.1% but are less than 5%, the agreement and the associated transactions are subject to announcement and annual review requirements but exempt from independent shareholders’ approval.
According to the announcement, the new annual transaction caps (New Caps) are set at RMB 480 million for 2026, RMB 540 million for 2027, and RMB 630 million for 2028. In determining these figures, historical transaction amounts, anticipated electricity consumption, and prevailing pricing structures in Guangdong Province were taken into account. The company stated that these arrangements are expected to secure consistent electricity sales and stable income for its energy business and further improve the utilization rate and efficiency of its power plants.
Guangdong Holdings is the ultimate controlling shareholder of Guangdong Investment Limited, with an approximately 58.26% interest in the company. As a result, Guangdong Yuehai Water is deemed a connected person, rendering the framework agreement a continuing connected transaction. One director, also serving as the chairman of Guangdong Holdings, abstained from voting on the relevant board resolutions.
The arrangement includes robust internal control measures, such as half-yearly utilization tracking against the new caps and review by independent non-executive directors and the company’s auditor. The board considers the agreement to be fair, reasonable, and mutually beneficial, aligning with commercial terms and the interests of both the company and its shareholders.